What is a Settlement
Before we proceed to the concept of settlement for a vehicular accident, let us know more about the concept of settlement. A settlement is basically used when a defendant is ordered by the court to pay a specific amount to the plaintiff, as a compensation for personal injury and damages. The settlement can also be made outside the court, where the plaintiff and defendant can agree upon a specific price.
About Auto Accident Settlement
A settlement court case for auto accident is often considered as a complex case. Such cases involve various fields and domains, such as insurance policies, laws regarding auto accidents, settlement concepts, medical and engineering assessments, etc. Thus, the decisions regarding settlement amounts is influenced as a result of many factors from different domains.
This kind of settlement is in some cases provided by the defendant himself. In many cases where the plaintiff sues the defendant for car damages, the auto insurance company of the defendant provides the plaintiff with adequate finances. In some cases, the auto accident insurance settlement is also provided by the way of a provision that is known as a ‘liability insurance’.
A liability insurance is usually availed by companies that specialize in logistics and transportation, as there is a great chance of being sued for road accidents. The settlement advice that is provided to such organizations is often specialized, and the liability insurance is recommended to avoid sudden and costly settlements.
The health insurance company of the defendant also furnishes the auto accident injury settlement, in cases where the plaintiff has sued the defendant for personal injuries. Thus, it can be said that a settlement for such a case consists of compensation for damages to the car, personal injury, compensation for pain and miscellaneous damages. In cases where the person responsible for the accident has acted against the traffic rules, then he is in for a tough time, as he will have to pay a heavy fine that is not covered by any insurance policy.
A settlement agreement may come into picture, when the defendant pays the plaintiff by the way of structured settlements, where the total compensation is paid by the way of several installments. Now, if the question arises, whether a settlement is taxable or not, let me state that the laws regarding the matter vary in all states. But, theoretically, if a person receives more damage compensation than the actual expenditure, then the amount that exceeds the amount of expenditure is taxed.